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| Borrowing took a record jump last year: EIH report |
| Namrata Acharya / Kolkata Oct 21, 2009, 00:50 IST |
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EIH Ltd, the Oberoi group’s flagship company, had recorded its highest increase in borrowing last year, as the company raised funds for its expansion.
Total borrowing saw a jump of over Rs 200 crore last year (as on March 31, 2009), the highest increase in the past five years. In the year before, in contrast, borrowing increased by just Rs 21 crore, according to data from the company’s annual report.
The loans have been secured against various properties owned by the company across the country.
This could have been a trigger for the proposed deal with Analjit Singh, who is set to become a strategic investor in the company.
In a year that the industry witnessed an “unprecedented downturn” as mentioned by EIH chairman P R S Oberoi recently, at least five projects of the company were at different stages of completion.
A closer look at the debt profile shows that in 2008, the company availed of a cash credit —typically used to meet working capital needs — amounting to Rs 89 crore, from United Bank of India and HSBC, by hypothetication of all stocks, book debts and other current assets of the company, both present and future.
In contrast, cash credit from the two banks in 2007 amounted to about Rs 9.96 crore.
United Bank of India, State Bank of India, Axis Bank and State Bank of Hyderabad are some of the bankers to EIH.
Though the bankers have not faced any repayment issues, they said the entry of a financial investor would be good for the company.
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